Practice

Feeling the Pinch

It's official: The economic slowdown has affected the nation's AEC firms, in the form of hiring freezes, layoffs, and a drop in revenue, according to ZweigWhite's 2008 Financial Performance Survey. The report includes data from 150 U.S. architecture, engineering, planning, and environmental consulting firms. Produced annually, the survey has become a go-to source for firms looking to improve operations?or check out the competition. About six years ago, it drove JCJ Architecture's strategic planning process, and it's been a guiding force ever since, says firm president Peter Stevens: "It has the kind of metrics we want to measure ourselves against." Within weeks of the report's July release, JCJ CFO Ann Iseley had plotted the 2008 data against previous years. "It's actionable," she says. "It won't tell you what to do or how to fix something, but it shows you where you stand."

58%Percentage of financial directors, across all firm types, who are women, a jump from 40 percent in 2005.

$106,845Architecture firm CFO average base salary. Across all firm types, CFOs of companies with 250-499 employees get a $50,000 bonus yearly, on average.

$8,304Average bonus cost per employee. For firms in the upper quartile, bonuses represented an average of 8.9 percent of the firm's gross revenue.

1.84The median firm revenue ratio, down from 1.87 in 2007. "If I had to pick one statistic to focus on, it would be [this]," says Ian Rusk, the ZweigWhite executive vice president who oversees the annual survey. "This ratio says for every dollar of payroll, the firm earns X dollars of revenue. A strong revenue factor would be 2.0."

16.8%The average annual turnover rate at architecture firms. When JCJ Architecture saw turnover rise a few years ago, it checked the survey before reviewing benefits, compensation, and performance management. Turnover is now in line with survey results.